© IBE ....doing business ethically makes for better business….

Business Ethics: the essential components

Philippa Foster Back OBE

Director

Institute of Business Ethics

www.ibe.org.uk

© IBE ....doing business ethically makes for better business….

Topics

Setting the sceneEthics, values and business

behaviours

Business ethics as a practical matterThe importance of ethics in business

Summary

© IBE ....doing business ethically makes for better business….

Setting the Scene

© IBE ....doing business ethically makes for better business….

What is Business Ethics?

… the application of ethical values to business behaviour …

Ethical Values

Business Behaviour the way we do business

= Ethical Business Conduct

Governance

Ethical commitments / Corporate Responsibility- to whom we are responsible:

- ways of working- relationships with stakeholders

Policies & Codes & Targets

Business Ethics is about …

Core business strategy

©IBE

© IBE ....doing business ethically makes for better business….

Values and ethics

All businesses operate on the basis of core values – implicit or explicit

These include business values and ethical values

© IBE ....doing business ethically makes for better business….

Identifying company values

Customer focus

Business values

Ethical values

Respect

Openness

Integrity

Transparency

Honesty Efficiency

Profitability

Quality

Trust

Customer focus

Forward thinking

Performance Reliability

Teamwork

Responsibility

Fairness

© IBE ....doing business ethically makes for better business….

Business Ethics as a practical matter

© IBE ....doing business ethically makes for better business….

COMPANY

employees

shareholders

NGOs media

regulators

suppliers

communities customers

stakeholders

interested partiescompetitors

Who is interested?

© IBE ....doing business ethically makes for better business….

Top business ethics issues for UK companies

1. Executive pay

2. Environmental responsibility

3. Discrimination in treatment of people Speak up policies (whistleblowing)

Gifts and entertainment

Conflicts of interest

Openness with information

Lobbying and donations

Work / home balance

© IBE ....doing business ethically makes for better business….

What are organisations doing?

© IBE ....doing business ethically makes for better business….

Code of Ethics

Code of Conduct

Communication&

Awareness Campaigns

Training &

Reinforcement

Elements of an effective ethics programme

Supporting context and

Culture

Monitoring&

Accountability

Ethical Values -> Ethics Policy

induction; on-line; dilemmas, debate; incentives …

leadership, strategy; polices; resources, business goals; compliance; CR, CSR …

what, why, how; understanding as well as information …

surveys, stakeholder engagement; business review, reporting…

•Guidance for Staff•The Way We Work• Business Principles•Our Commitments & Standards …

embed, implement, make operational …

Embed values -> behaviour

© IBE ....doing business ethically makes for better business….

Underpinning Risk Management

© IBE ....doing business ethically makes for better business….

When does a business problem involve ethics?

When it is not covered by the law If it raises moral problems for a member of

the team If it makes you reflect on what is a correct

and incorrect response If you are forced to consider where your

obligations and duties lie.

© IBE ....doing business ethically makes for better business….

Some red flagsIf you hear someone say any of these,

you can expect something unethical is about to happen!

“Well, maybe just this once.” “No one will ever know.” “It doesn’t matter how it gets done as long as it gets

done.” “Everyone does it.” “Don’t worry, it’s part of the culture.” “Shred that document.” “We can hide it.” “What’s in it for me?” “We didn’t have this conversation.” “I don’t want to know.”

© IBE ....doing business ethically makes for better business….

© IBE ....doing business ethically makes for better business….

Summary

© IBE ....doing business ethically makes for better business….

Doing Business Ethically

Improves trust and morale internally

Helps to ensure consistent conduct

Reduces risk

Strengthens external reputation

Over the long term will benefit the bottom line

© IBE ....doing business ethically makes for better business….

Business EthicsValues

Ethics Culture Trust &

Reputation

Conduct AND Financial

Performance

Risk

© IBE ....doing business ethically makes for better business….

© IBE ....doing business ethically makes for better business….

Thank you

www.ibe.org.uk